MNI PREVIEW: Canada Seen Losing Record 4M Jobs in April

By Anahita Alinejad

     OTTAWA (MNI) - Canada is expected to report employment fell by 4 million in

April amid the unprecedented shutdowns triggered by Covid-19, a staggering

figure for a nation of 38 million people.

     The estimate in an MNI economist survey would be four times the 1 million

job decline in March as health restrictions kept most people at home. The

unemployment rate is seen jumping from 7.8% to 16.6%, the highest in records

back to 1960 and likely the worst since the Great Depression in the 1930s.

     Investors should look beyond headline figures to assess workers who are in

limbo facing temporary or permanent layoffs, and numbers that suggest how much

GDP will decline. Those include hours worked, which fell a record 15% in March,

wages, participation rates, and Statistics Canada's update on its March estimate

that 3.1 million people had their work curtailed.

     Governments ordered most non-essential businesses to close in March and

restricted restaurants to take-out service, and are only now moving to open a

handful of enterprises where people can be kept six feet apart. Canada's GDP may

drop as much as 30% in the second quarter from the end of last year, the central

bank says. 

     --FURTHER LAYOFFS?

     While the federal government is using record deficit spending to tide over

individuals and businesses affected, by the end of April 37% of small businesses

indicated that won't help them avoid further layoffs. Only 20% of smaller firms

were fully open during April, according to the Canadian Federation of

Independent Business. 

     "The most favorable scenario assumed that measures to slow the spread of

the virus would start to be lifted in May and June," BOC Senior Deputy Governor

Carolyn Wilkins said May 4. "This is still within reach, but by no means

assured." 

--MNI Ottawa Bureau; +1 613 981-1671; email: anahita.alinejad.ext@marketnews.com

[TOPICS: M$C$$$]